Aviva plc (LON:AV.) has announced its interim results for the first half of 2024, revealing a strong financial performance characterised by significant growth in operating profit, cash remittances, and capital generation. The company’s operating profit increased by 14% to £875 million, while Solvency II operating own funds generation rose by 10% to £758 million. Cash remittances were up 16% to £959 million, indicating robust cash flow across the business.
The company’s financial stability remains solid, with a Solvency II shareholder cover ratio of 205%. Aviva also announced a 7% increase in its interim dividend to 11.9 pence per share, continuing its commitment to delivering value to shareholders.
Strong Market Performance Across Key Segments
Aviva’s Insurance, Wealth & Retirement (IWR) segment reported sales of £19.7 billion, a 12% increase from the previous year. This growth was driven by a 49% rise in protection sales, bolstered by the acquisition of AIG’s UK protection business, and a 16% increase in wealth net flows. However, retirement sales saw a slight decline, reflecting contraction in the equity release market.
In the General Insurance sector, Aviva reported a 15% increase in premiums, with notable growth in the UK & Ireland (up 18%) and Canada (up 10%). The undiscounted combined operating ratio (COR) was 95.4%, slightly higher than the previous year, indicating a strong underwriting performance.
Strategic Growth and Capital Management
Aviva continues to focus on capital-light growth, with plans to achieve 70% capital-light operations by 2026. The company also completed a £300 million share buyback in the first half of 2024, with further sustainable returns expected in the future.
CEO Amanda Blanc highlighted the success of Aviva’s diversified business model, which has allowed the company to maintain leading positions in key markets such as workplace pensions and general insurance in the UK and Canada. She expressed confidence in the company’s future prospects, citing favourable trading conditions and a stable UK market.
Outlook for 2024 and Beyond
Aviva plc remains optimistic about its future, aiming to achieve an operating profit of £2 billion and Solvency II operating own funds generation of £1.8 billion by 2026. The company plans to continue investing in its business and pursuing targeted mergers and acquisitions (M&A) to sustain its growth trajectory.
